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Financing the sustainable takeover of farmed fish production

ImpactAlpha, May 9 – The world’s seafood farmers will need to invest up to $300 billion over the next decade to meet the booming demand for fish protein.

Such capital expenditures represent an opportunity for impact-minded investors to promote sustainable farmed fish production, according to “Towards a Blue Revolution,” a guide to sustainable aquaculture from The Nature Conservancy and Encourage Capital.

With oceans in peril, investors find new ways to invest in the ‘blue economy’

“Driving additional investment toward these low-impact production methods can help ensure that they achieve commercial scale and become more competitive relative to conventional production systems,” write TNC’s Robert Jones and Encourage Capital’s Jason Scott.

  • Growing demand. The people want it. Sustainable seafood production is growing 10 times faster than conventional seafood. Sustainably sourced fish accounted for 14% of total seafood production in 2016, up from 0.5% in 2014.

  • Three opportunities. Among the high-impact, high-growth aquaculture production systems ripe for investment: Seaweed and bivalve systems (think oysters, clams and scallops) that require few inputs and act to restore degraded habitats. On-land finfish systems that can treat wastewater and take production out of the marine environment. Off-land finfish systems that move activities into deeper waters and away from critical habitats.

  • Catalytic capital. Heavy capital expenditures and unknown risks have scared off investors. Concessionary and risk-taking capital can pave the way by subsidizing tech R&D, prototyping production of new species and underwriting “first plant” risk. For seaweed and bivalve models, inexpensive debt can help scale up production.

  • Investor mobilization. The Meloy Fund raised $22 million for sustainable fisheries last year. Dutch sustainable aquaculture investor Aqua-Spark, with $81 million in assets under management, has backed 16 companies. The first investment from Althelia’s $37 million Sustainable Ocean Fund was in Kampachi’s sustainable tuna farm in Baja California. Pescador Holdings, developed by Encourage, has made investments in Geomar, a Chilean producer of canned seafood that works with small-scale fisherman, and Portland, Ore.-based Fishpeople, which sells packaged meals featuring sustainably caught fish.

  • On the beat. Follow ImpactAlpha’sFinancing Fish” vertical where we track investor activity and enterprises targeting healthy, sustainable and tasty fish. ICYMI: With oceans in peril, investors find new ways to invest in the ‘blue economy.’

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